These were the most recent summaries of the economic outlook released by the Fed ... not much to smile about but entirely understandable given current and recent economic performance. Our government has much to do with feeding the uncertainty.
People scurry to pay down debt and trim expenses, reducing demand for products and services. Businesses hoard cash rather than invest because of sluggish demand and uncertainty about tomorrow's business environment: what is the outlook for corporate taxes...after all we have the highest corporate tax rates in the OECD. Of the OECD countries only the US taxes on a worldwide basis.
How about the carbon tax or least a higher gasoline tax to make things more certain?
What is the health care bill going to cost medium and small businesses?
Will secret ballots no longer be required for union certification?
Why all the anti-business rhetoric, could it be populism?
Speaking of anti business talk, populism and taxes all at once, what about the move to further tax oil and gas firms in the name of deficit reduction ? Is there any more popular target? Wait a minute! what about the Chinese?
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ReplyDeleteHey Dad,
ReplyDeleteI think we could use a bit more populism actually; it might help counterbalance the billionaires anonymously funding the fear mongering in these elections thanks to the supreme court. I think the administration has been pretty middle of the road when they could have done more, and its hard to characterize a government that oversaw Bush's TARP without much change as anti-government.
My main fear is that instead of using the recession to transform our economy we've allowed the Republican minority a veto on everything and they've used it in bad faith to halt all progress.
I'm happy to hear more rooting for the gas tax though; check out
www.carbontax.org/issues/softening-the-impact-of-carbon-taxes/ I think a
carbon tax with a quarterly refund check would do a lot to get people spending
in the right ways and would generate the kinds of ferment and Schumpeter style
creative destruction that creates real jobs.
I expect the health care bill we save my business money when I can use an exchange to buy insurance I have to buy anyways. Its already saving me money by forcing UHC to pay for preventative care.
The fact that businesses and the wealthy are holding off on expenses while they wait to see how the economy goes isnt pretty much par for the course in every recession. With a deadlocked Senate and an iresponsible opposition I personally have no intention to buy US stock indexes again for the foreseeable future. Without a realistic chance of achieving liquidity in the IPO market the bright spots of innovation in Silicon Valley wont be enough to pull up the rest of the economy.
The only way out is to rollback the bush tax cuts, and use that revenue to fund a few years of small/medium business hiring tax breaks/subsidies to take that money out from under the wealthy mattresses and get it into the wallets of the working and middle class people who used to be the engine of our prosperity.
Protecting those same consumers from predatory loans (credit card or payday loans) with a consumer financial protection agency isnt anti-business; its pro-business. We need the lower and middle class to experience real income growth, not just debt fueled spending, if we want this economy to wake from the dead.
Later.
Matt